It would be well deserved karma if Nvidia collapsed under their own greed
Can you share how they are particularly more greedy than any other tech company?
I can, but why would I substantiate a claim that I never made?
You’re acting like NVIDIA specifically is extra greedy
If you were an AI, I’d say you’re hallucinating.
I’m literally asking for what you’re basing it off of, which I can then read and learn more about the situation. Yall are so sensitive.
I have a little perspective to offer on this:
One of the core points of the author’s argument is, “Generative AI providers are operating at a loss, and I don’t see how they could become profitable”, specifically calling out ‘where are the new customers’?
I work at a company that is a direct customer of OpenAI and we get real, useful output from it. If they were to double or even triple the price, I’m almost certain that we’d just pay it (as it’s I very cheap at the moment). I’ll admit I’m not actually running numbers, iirc several of the companies mentioned were near break even, so doubling revenue would make them very profitable.
So my argument here is that I don’t think they need new customers, they just need to raise prices. Launching with unprofitable prices and jacking them up later once people get a taste is part of the standard tech industry playbook and wouldn’t be the least bit surprising in this situation. The company I work for has only small integrations so far, but I can imagine that at some companies almost their entire service is based on using LLMs, in which case the providers would literally have the ability to charge whatever they want.
Also fwiw, I’m a gen ai hater, and wish it would collapse and go away, but I’m not entirely convinced by this guy’s argument, but maybe if I looked harder at the numbers it might become obvious that the price increases I’m suggesting still won’t cover investment expenditures.
It’s kind of the same when any new tech enters the market, first you get your product out there below any competitors to capture as much of the market as possible, then you slowly raise prices.
Some may be closer to break even, but openAI is tens of billions in the hole (something like 13.5 billion net loss in the first half of the year alone).
Sure, they could triple prices but then you lose a percentage of customers etc etc.
Yeah, I did realize that the break even ones I think largely are using OpenAI as part or all of their capacity, so they probably aren’t really break even for that reason - OpenAI is subsidizing them.
I appreciate how this newsletter/article does a solid job of highlighting some of the weird dealings we may be seeing that make these companies look more viable than they are (very much including these companies essentially subsidizing each other).
The big thing I keep coming back to is that there doesn’t seem to be a path to profitability for the LLMs. Chapo Trap House had an interview with Ed Zitron and he highlighted that some of the power users are pulling down over $50k in generation/prompt costs while spending $20 a month (or whatever, I’m spitballing the numbers).
God, that was such a good read.
I love ed
…and not really much else that has any kind of revenue potential.
I stopped reading there.
Yeah, Nvidia is up to some shady, circular cash flow, literally criminal financing. They’re all in on AI Bro.
But this blogger is totally ignorant of what they’ve been up to the past decade. They’re still a graphics company. They have huge gaming and workstation markets; hell, almost a monopoly in them.
And they’ve been pushing virtual spaces for a long time. Stuff like industrial robotics, synthetic data generation before AI got popular, simulation, all sorts of things. If every single LLM disappeared tomorrow, and their financing scheme implodes, Nvidia would be just fine, and carry on as usual.
And while I’m ranting, they’re wrong about CUDA too. It’s a monopoly for the research space, but absolutely not for production inference/training. If you want proof, see one example of many: https://arxiv.org/abs/2505.04519
As well as the massive NPU-trained MoEs on huggingface now.
“AI” is already moving off of Nvidia, but the cutting edge of whatever is en vogue next will still be on Nvidia. I don’t know if that’s bullish or bearish, and I don’t really care.
AI is now 90% of Nvidia revenue: https://incomeshares.com/en-eu/insights/nvidia-revenue-change-since-2020
If 90% of Nvidia revenue were to suddenly disappear, it wouldn’t matter that they used to be the leading maker of gaming hardware — they’d be completely radioactive to investors for the rest of time and their stock would drop to zero. All of their top talent flees to AMD or wherever, and Nvidia becomes a mere footnote in the history of corporate American hubris.
I disagree.
I remember when AMD stock was $2 a share, not that long ago. I bought it at $8. They were basically dead to investors, and unlike Nvidia, they had very little market share in anything or hope of crawling out. But the company itself was still operating.
Even if AI disappears in a puff of smoke, even with their risky “vibe revenue” financing, Nvidia is in a far stronger position than that. They have cash, they aren’t under a pile of debt, and they have tons of diverse non-AI revenue, including oldschool HPC datacenters.
In other words, the stock market is not the real world.
